Education: Tax Changes You Need to Know

As students gear up to head back to school, there are some changes to education deductions that could save or cost you more in taxes and even raise college tuition costs. Here is what you need to know to get up to speed:

What is gone

Continuing Education as an itemized deduction: In previous years, you could deduct expenses paid for job-related continuing education as a miscellaneous itemized deduction. This deduction has been eliminated. However, if your employer will pay for the education, they can cover up to $5,250 tax-free.

Home equity line of credit (HELOC) interest for education expenses: A popular method of generating cash to pay for school expenses is taking out a HELOC. Beginning in 2018, you can only deduct HELOC interest if you use the loan proceeds to buy, build or substantially improve your home. This means that if you plan to obtain HELOC for purposes of paying for education expenses, the interest will not be deductible. [Read more…]

Is a Tax Surprise Waiting for You?

Often lost in the excitement of large-scale tax change is how they can negatively impact some individual situations. Check out the questions below to see if you might be in for a tax surprise this year. [Read more…]

Upcoming Dates

September 3: Labor Day

September 17:

  • 3rd quarter estimated tax due
  • Filing deadline for 2017 S corp and partnership returns that received extension

October 1: SIMPLE IRA plan establishment due

Single incident can support hostile work environment claim

Sexual harassment claims tend to take one of two forms: “quid pro quo” harassment, where a supervisor offers favorable treatment in exchange for a sexual relationship, or “hostile work environment” harassment, where a supervisor or co-worker engages in offensive or intimidating conduct that makes the workplace intolerable.  For hostile environment claims, courts look for conduct that is “pervasive.” But a recent federal court case from New York shows that in some instances, one or two incidents can be enough to land an employer in hot water.

In that case, a male corrections officer home recovering from knee surgery was using the bathroom when his male supervisor called to check on him. When he returned the supervisor’s call, he claimed the supervisor asked him if he’d been masturbating.  He also claimed that two years later, while he was sitting in a booking room, the supervisor started rubbing his shoulders and told him in very crude language what he would do to him sexually if the supervisor was a woman. [Read more…]

Employer faces claim by employee ‘regarded as’ disabled

The Americans with Disabilities Act (ADA) provides broad employment protections for people with disabilities. For example, under the ADA, employers cannot take a “negative employment action,” e.g., demote, underpay, refuse to promote or refuse to hire a worker, based on his or her disability as long as the worker is capable of doing the job with “reasonable accommodations.”

But did you know the ADA will also hold employers accountable if they discriminate against a worker who they “regard as” disabled, even if the worker doesn’t actually have a disability?

This happened recently in Illinois. Ronald Shell applied for a job in a Burlington Northern Santa Fe Railway railyard. The job was a safety-sensitive position that involved working with heavy equipment. [Read more…]

High burden for employers justifying pay disparities

Under the federal Equal Pay Act (EPA), employers are required to pay men and women equally for work that requires “substantially equal” skill, effort and responsibility under similar working conditions. Employers who violate the EPA by paying women less than equally qualified men for the same work risk serious consequences, including enforcement actions by the Equal Employment Opportunity Commission and lawsuits by employees who claim they’ve been discriminated against.

Employers can defend themselves against EPA claims by claiming they had “gender-neutral” reasons for a pay disparity. But a recent ruling by a federal appeals court shows that employers have to meet a high standard for this to work.

In that case, three state employees in Maryland sued their employer under the EPA, complaining they were being paid less than male co-workers with the same qualifications. [Read more…]

Employers must document performance issues

A recent seven-figure jury verdict in Massachusetts shows that employers who encounter workers with performance issues must document those issues or leave themselves vulnerable to discrimination and wrongful-termination claims.

The employee in question, auto mechanic James Bereford, was fired at age 61 after working at a garage that was part of a regional chain for more than 30 years.

According to the employer, Bereford lost his job because of attitude problems and poor performance. Specifically, the company claimed they fired him because he actively resisted new management’s efforts to modernize garage operations. For example, he apparently refused to use vehicle maintenance software that the company installed to manage its repair services, insisting the old paper record-keeping system was more reliable. He also allegedly told the bosses, “I don’t do computers” and said he had no intention of learning how to use them. [Read more…]

How to address workplace misbehavior in the #MeToo age

Sexual harassment and other forms of sexual misconduct have been front and center in the media for months now. Reports of film mogul Harvey Weinstein’s conduct, followed by reports of similar behavior from other famous and powerful men in entertainment, politics, sports, and business, have sparked a new awareness and intolerance for conduct that crosses the line.

Meanwhile, the #MeToo movement has empowered victims to come forward and report misbehavior.

This has implications for employers.  Sexual harassment has been considered a form of illegal discrimination for several decades and employers have long been expected to take allegations seriously. But now there’s an even higher expectation that employers will actively address workplace sexual misconduct and proactively take steps to make it less likely to occur in the first place. Employers who fail to do so risk negative publicity, legal liability and the serious financial fallout that can follow. [Read more…]

Football participation for kids source of conflict in family court

Divorcing parents fight over a range of issues, from big questions like who the children will live with and how to handle major educational and medical decisions to some relatively minor issues.

Now another source of contentiousness has emerged: whether the kids should play football.

As more and more evidence links football to long-term brain damage, a lot of parents are having second thoughts about whether their children should play the sport. This has resulted in disagreements that led to some parents going to court over whether their custody orders should bar their kids from taking the field. [Read more…]

Deceased worker’s retirement benefits go to sister, not wife

If you’re getting married and want your retirement and other similar benefits to go to your new spouse if you pass away first, it’s very important to update all your policies and plans to name your spouse as the beneficiary. Otherwise, your property might not get distributed in the way you want.

This happened recently in Texas. A man got married in 2003 but never changed the beneficiary designation for his retirement benefits. He died eight years later.  His wife was also the executor of his estate and went to probate court seeking a ruling that the benefits were rightfully hers as “community property.” The judge, however, said they belonged to her late husband’s sister, who was named as the beneficiary. [Read more…]